Govt. Claims/Sovereign Immunity

Puerto Rico is burdened by over $70 billion in debt, as well as approximately $35 billion in pension underfunding. Once the U.S. House of Representatives passed H.R. 5278, the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), in early June and the Senate passed it on June 29, 2016, President Obama signed the bill immediately — and just in time to address a $1.9 billion payment that was due on July 1, 2016. PROMESA offers relief to Puerto Rico, its municipalities and municipal agencies following a 10-year economic recession. This panel describes the circumstances that led to the financial crisis, the failed effort of the Puerto Rican government to offer relief through a "state" statute that was found to be unconstitutional by the Supreme Court, and the details of how PROMESA is designed to work. The session provides an opportunity to discuss these issues in a casual setting, including the way forward for Puerto Rico, and features a panelist who served as Hon. Steven Rhodes' expert on feasibility issues in the City of Detroit chapter 9 case.

Albert Gallatin was the longest-serving U.S. Secretary of the Treasury (1801-1814) and came into office as a professed anti-Federalist, ardent proponent of fiscal responsibility, and vocal opponent of Alexander Hamilton’s financial policies. However, Gallatin failed to accomplish the Jeffersonian objectives of shrinking the national debt and eliminating taxes, as he was forced to finance a war with Great Britain and the purchase of the Louisiana territory. Gallatin also supported the First Bank of the United States and proposed federally financed infrastructure projects. Consolidation, it seems, is complicated. A discussion of the early history of sovereign debt in the U.S., in particular the roll-up of the obligations of the colonies into the newly constituted federal government, the role of the First Bank of the United States, and the political challenges of managing the debt. Sovereign debt sustainability and valuation in the modern era, focusing on governments’ ability and willingness to pay, the role of central banks, and a potential resolution to the euro area crisis, will be addressed.